SHUVAM framework: The Guide to Creating and Sustaining a Profit Monopoly
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SHUVAM framework: The Guide to Creating and Sustaining a Profit Monopoly

Published : September 12, 2023

Do you, fellow marketer, run paid digital ad campaigns to acquire new users?

In all probability, you do.

Do you know that you’re losing money by paying for ads that don’t help you acquire consistently paying customers?

Again, in all probability, you do.

But, do you know that you don’t have to be part of the $200 billion-a-year AdWaste disaster any longer? You can right now stop wasting money on digital ads that don’t work anyway and, better still, maximize your profitability year-over-year.

How exactly can you do it? Through an innovation called the SHUVAM framework.

This article lays bare the SHUVAM framework that maps the path to sustainable, exponential, and profitable growth. If followed rigorously, this framework can help you create the ultimate endgame – the profipoly (a profits monopoly).

Before delving into SHUVAM, let’s take a moment to talk about a concept called ‘ProfitXL’. As conventional digital marketing tactics, like paid ads, stagnate without becoming affordable, a set of innovations have risen to end AdWaste and supersize brand profits. This is ProfitXL – a strategy to supersize (eXtra Large as denoted by XL) profits by eliminating BadTech (the short form for Big Adtech) and flipping the funnel of brand-customer relationships to solve marketing crises.

SHUVAM is a strategy that implements the ProfitXL mindset. The acronym comes from Story, Hotlines, Unistack, Velvet Rope Marketing (VRM), Acquisition (done right), and a new set of Metrics.

SHUVAM Framework - Netcore Cloud

Let’s explore each tenet of SHUVAM in its own right

Story

To get to ProfitXL, marketers have to understand what is holding them back in the first place. First and foremost, they must prepare to shift their mindset from Adtech to Martech and from acquiring new customers to delighting existing ones.

Marketers ignore existing customers, and do not create personalized, tailored experiences for existing Best Customers. Additionally, when creating acquisition strategies, they also don’t invest much in leveraging the power of referrals, reactivation, and smarter acquisitions based on data from current customers.

No wonder then, businesses keep pushing more money into the new customer acquisition funnel. By not valuing and serving existing customers, brands end up losing them. On the other hand, all that Ad money gets them a few semi-interested folks signing up after being bombarded with messaging they don’t really care about. Such new signups usually lead to nothing, since customers often uninstall the app soon after or ignore marketing messages after signing up.

Story in SHUVAM stands for rethinking the marketing story, of seeing things from the POV of marketing’s current, seismic polycrisis.

Marketing Polycrisis - Netcore Cloud Mindset Shift from New Customers to Existing Customers - Netcore Cloud

Hotlines

Marketers spend money acquiring customers and then hope they will make purchases on the brand’s site/app. This doesn’t usually happen unless the marketer finds a way to reach the consumer’s subconscious and imprint brand loyalty there. Needless to say, this is a difficult feat to pull off.

Currently, businesses push messages to already flooded inboxes, along with nudges and recommendations prompting consumers to click through to a site or app for customer acquisition. Customers ignore these messages completely as they are saturated with similar messages from different brands.

This ‘attention recession’ has spelled doom for marketers – if users do not open and act on their emails, SMSes and push notifications, they have to retarget them on the Badtech auction platforms… by spending even more money.

The innovation triad

Thankfully, a triad of innovations is changing the landscape: AMP emails, WhatsApp, and Atomic Rewards. AMP emails are capable of website-like interactivity. WhatsApp allows brands to directly interact with customers within the message, and Atomic Rewards offer gamified micro-incentives to encourage attention and sharing of personal information (zero-party data).

AMP, WhatsApp, and Atomic Rewards can thus drive inbox engagement and push the funnel closer to actual customers.

AMP, with its underlying email base, costs a fraction of WhatsApp (controlled by Meta). But it lets customers do everything they need to, from within their email inbox. They can fill out forms, play games like spin-the-wheel for surprise rewards, use calculators to do the math on prices/payments, check product details, purchase products in abandoned carts, search for new products, and make final payments.

Atomic Rewards pays existing customers instead of paying Badtech. At this point, you move beyond the transaction to incentivizing and gamifying the upstream (attention and data) and the downstream (ratings, reviews and referrals) of customer engagement. Atomic Rewards trigger a reward-based ecosystem for both brands and customers – the more customers take action, the more tokens they get… and the more they act, the more brands value them with tangible rewards.

AMP in email, WhatsApp and Atomic Rewards turn one-sided messages into conversations. They provide marketers with a direct link to their customers. Hotlines help you build lasting customer relationships – the very definition of a win-win for both brands and customers.

Data poverty in push channels - Netcore Cloud

Unistack

Over the past few years, marketers have combined multiple point solutions to create martech stacks to collect data from websites and apps, automate customers, segment customers, and run push and personalization cross-channel campaigns. But this fragmentation of data caused by using such different tools makes it hard for marketers to see the customers in their entirety.

Marketers can fix this fragmentation by upgrading their martech stack with second-generation all-in-one solutions – the Unistack. This Unistack combines customer data, engagement, and experience management. It enables marketers to significantly improve customer relationships by moving towards frictionless omnichannel personalization.

Next, marketers can drive superior outcomes by implementing a better search experience for shoppers.

Most marketers tend to use the default search software that comes with their eCommerce platform or pick an open-source utility to keep costs low. This is a big mistake. Search has been the most powerful application on the Internet for a very long time, and it needs to be used in accordance with that potential.

A powerful site search engine can do wonders for revenue growth. AI engines can expand product descriptions beyond what humans can. They can also match products to customer intent with a precision humans cannot match, leading to more fruitful and pleasing shopping experiences.

The third solution is to create a ‘Progency’ – a new-gen martech services entity where product (Unistack) meets agency. A Progency can work like a performance marketing entity taking on KPIs and delivering the outcomes marketers want.

But, to do its job, a Progency will need to combine software and analysis with traditional creative expression. Think of it as your marketing department’s silver bullet that can take on certain tasks with payment linked to performance.

This Unistack, equipped with high-value search capabilities and utilized by the Progency can deliver the personalization needed for customers to want to buy what they already want.

Drive frictionless omnichannel personalization - Netcore Cloud

Velvet Rope Marketing (VRM)

VRM is the core of SHUVAM. It is often called by other names – customer-centricity in Wharton professor Peter Fader’s books, red carpet marketing as some have termed it, or simply loyalty marketing.

In VRM, a number of customer accounts end up generating massive revenue, with more than 100% of all profits. Yes, this is a real, repeatable occurrence.

This happens because the long tail is lossy; the customers in the long tail hurt profits and cause losses due to the cost of their acquisition and servicing. Hence, the Best customers’ profits offset the losses incurred from the long tail customers. This is best illustrated by the Whale Curve below:

Velvet rope marketing - Netcore Cloud

(The above are indicative numbers that can vary from brand to brand.)

Unfortunately, despite this obvious truth, marketers continue to treat all customers to the same experiences. If everyone received such undifferentiated, ‘equalizing’ experiences, what motivation does any customer have to be loyal to a brand?

An effective VRM program needs three elements:

    When you know your Best Customers at an individual level, you can create entirely personalized experiences that drive them to actually hit their CLC threshold. The key is to offer experiences that prioritize exclusivity, ease and access. Treat your Best Customers as Royalty rather than as numbers in a Loyalty program.

    Create differentiated experiences for best customers - Netcore Cloud

    Acquisition

    Marketers focus on acquiring new customers instead of building on relationships and driving revenue from customers who already exist in their ecosystem. With Hotlines, Unistack, and VRM, the table turns – existing customers become the priority.

    Obviously, driving growth will continue through new customer acquisition, but the process must reorient by making ‘near-zero CAC’ the objective. There are three ways to reduce CAC: referrals, reactivation, and BCG-influenced acquisition.

      Acquisition: Restructured for near zero CAC - Netcore Cloud

      Metrics

      Now, profits are the ultimate metric.

      But too many components of profit are out of a marketer’s hands. However, they can still gain much needed insights from three interesting metrics – AdWaste, Martech Spend Ratio (MSR), and Earned Growth.

      AdWaste can actually be measured. It comprises wrong acquisition and reacquisition. Marketers need to explore their databases and calculate what percentage of acquired customers are still active after a predetermined period of time – usually a few months. Mark the rest of the customers, especially those who left without making a purchase, as ‘wrong acquisitions.

      MSR is the percentage of budget spent on existing customers from the overall Martech budget. In most brands, the MSR is about 10-15%, meaning that 85-90% of the Martech budget is being spent on Badtech for new customer acquisition. Marketers should aim to shift the budget from Badtech to Martech and get MSR to >50.

      Your brand can create better profitability and sustain it

      First, you need to get on board the innovation train to make it happen. 

      The ProfitXL mindset and SHUVAM strategy are the very definition of such innovation. They have been ideated on, concretized, and implemented to specifically help marketers increase revenue, reduce spending, and improve shopper experiences. With them in the picture, there is no more need to throw money into the eternal void that is AdWaste.

      Instead, marketers can focus on driving profit to the extent that their brand becomes a Profipoly.

      This article comprises excerpts from the blog “ProfitXL: Supersize Profits with the SHUVAM Framework” by Rajesh Jain. He is the founder and Group MD of Netcore Cloud, a bootstrapped SaaS company that helps brands create outstanding AI-powered customer experiences at every touchpoint.

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